From Knowledge Management to Innovation

What comes to mind when you’re asked about the reasons for having a knowledge management function? Is it about sharing across the organization? Is about dealing with the vast quantities of information that we generate and use today? Is it about capturing information from transitory knowledge workers? When I am asked about my interest in having a knowledge management function, I almost always use a one-word answer: Innovation.

Over the last decade, we have seen an increase in the academic literature around the links between knowledge management and innovation. Many of these point to the need for effective knowledge management as a means for driving and sustaining innovation. The Australian government has a useful piece on how knowledge and innovation interact. It states that “For organisations to innovate—and thus sustain competitive advantage—requires the ability to quickly adapt to the business environment and save time-to-market. This adaptation requires learning, problem-solving, and the production and integration of relevant new knowledge in response to business problems.”

Not only are people writing about this link between knowledge management and innovation, we are starting to see university courses being offered on this specific topic. For example, Cranfield University in the U.K. runs a MSc course that aims to “… create the next generation of technical and business leaders who can drive strategic innovation and collaboration by effective management of organisational knowledge ….”

During a meeting of the Conference Board’s Knowledge and Strategy Exchange Network (KSEN), there was a discussion on this topic and an inside look into Samsung and how it utilized knowledge management to drive innovation. Like a number of other companies in Asia, Samsung had a lot of skills and knowledge in manufacturing and production. However, for it to continue to compete in the long term, it needed to be able to develop and offer its own products rather than remain as a subcontractor for other organizations. Knowledge management was seen as a key element in helping Samsung transition into a more innovation-driven organization.

Samsung took the approach that there was a need to identify key areas where it needed to manage knowledge rather than imposing a system across the entire organization. These areas, where Samsung was most innovative, would be managed and measured accordingly. This allowed the organization to manage and share innovation in areas where it was strongest and to build and manage new knowledge in areas where it was weaker. This played an integral role in shifting Samsung’s strategy from a “fast follower” model to a more innovation-based system.

Eventually, Samsung developed the capability for designing new products as its knowledge improved and could be shared and combined with the depth of knowledge it already had within the company. The intersection and sharing of knowledge was a key factor. The company’s successes in today’s electronics market, as a major brand name with a range of innovative products, certainly owes something to this approach.

There are many others that have acquired knowledge and then managed and shared it effectively to develop new capabilities, ultimately using it to drive innovation and new products. Hyundai and its move from a parts manufacturer to a major automobile producer is another example of this. It can be argued that Apple Inc. does this as well through the purchase of other companies and managing newly acquired knowledge in its drive to develop new and innovative offerings.

Using knowledge management to help drive and sustain innovation is not a new idea. However, innovation does not always seem to be a major factor in knowledge management discussions. We need to remember that managing knowledge is not just about capture and dissemination—it is also very much about enabling the development of new ideas and driving innovation.

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